Southern Delivery System: Reclamation raises the stakes $200 million

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From The Colorado Springs Gazette (Eileen Welsome):

At issue are $200 million in potential additional costs that the federal government wants to impose on Utilities and its partners for storage and conveyance of water through Pueblo Reservoir. Utilities contends the costs are unfair and much higher than what other water providers, such as Pueblo, are charged. “We should be treated fairly and equitably,” said Utilities’ John Fredell, SDS project director.

Colorado Springs City Councilman and Utilities board member Sean Paige said the fees are outrageous. “The whole thing is appalling,” Paige said. “The Bureau of Reclamation isn’t there to squeeze every dollar that it can from the city through these negotiations. They’re supposed to be helping us to come to an equitable arrangement to manage this water project.”[…]

Fredell and his team will face off against Bureau of Reclamation officials in a two-day session scheduled to begin 9 a.m. Thursday at Fountain Valley School of Colorado. The negotiations are scheduled to resume 8 a.m. Friday at the same location. Like the previous two sessions, May 25 in Pueblo and June 15 in Colorado Springs, the public is invited. Although public negotiations are a little like showing your cards to opponents in a high-stakes poker game, it’s the policy of the bureau to conduct negotiations in public, said spokeswoman Kara Lamb.

More coverage from Chris Woodka writing for The Pueblo Chieftain. From the article:

The next round of negotiations will begin at 9 a.m. Thursday and continue at 8 a.m. Friday at the Fountain Valley School, 6155 Fountain Valley School Road, Colorado Springs. It will be held in the Bancroft Room of the campus library. The two sides ended far apart at the end of the last session in June. Reclamation’s offer calls for storage and conveyance for $75 an acre-foot and $50 per acre-foot for an annual exchange. An annual inflation factor of 3.08 percent is included.

The terms were called “unacceptable” by SDS Project Director John Fredell at the conclusion of the last session. Colorado Springs is asking for a storage and exchange fee of $17.35 per acre-foot, with no conveyance fee for the structure it wants to build, a North Outlet Works on the face of Pueblo Dam. Its inflation factor is 1.79 percent annually. Colorado Springs is negotiating on behalf of its SDS partners, Security, Fountain and Pueblo West.

More Southern Delivery System coverage here and here.

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